Household electricity prices are on average rising 23 percent as of Sept. 1, according to a decree the nation’s energy regulator, Ukrainian National Energy and Utilities Regulatory Commission, imposed in February. Prices are set to continue growing by up to 3.5 times in five stages by March of 2017.
Ukrainians will start paying Hr 0.45 per 1 kilowatt, taking into account that before it was Hr 0.37.
This tariff becomes effective if the overall volume consumed does not exceed 100 kilowatts. For those who consume more, the following pricing system
comes into effect: Hr 0.79 for 1 kilowatt if the volume consumed is 100-600
kilowatts; if more than 600 kilowatts is used, electricity costs Hr 1.48.
According to a
statement on the regulator’s website, NERC gives four reasons why the public
paid less for electricity before. Among them were populist motives, outdated
equipment, and the use of tax revenue to cover arrears.
Unlike the gradual
electricity tariff increases, alcohol prices on Sept. 1 will rise by up to
25-40 percent depending on the type of beverage.
The Cabinet of
Ministers voted for the two-step alcohol price hike on June 17. Since then, the
first increase took effect in the summer. As of Sept. 1 the second phase went
into force with one liter of spirits costing an additional Hr 25, whiskey Hr 50
more, and Hr 24 for cognac. Thus, a half a liter of vodka will cost not less
than Hr 55, Hr 109 for the same amount of whiskey, and Hr 89 for cognac. The
cheapest sparkling wine will cost Hr 49 for 0.7 liters.
Also rising are
government payouts. The initiative will cost up to Hr 10 billion, according to
a nationally televised address by Prime Minister Arseniy Yatsenyuk on Aug. 30.
The minimum wage will grow as of Sept. 1 from Hr 1,218 to Hr 1,378. Moreover,
this will affect the minimum pension as well as payments for some categories of
state employees.
“The main consequences will be
added inflationary pressure and tax burden on the economy,” Alexander Paraschiy of Concorde Capital said in an
emailed note. “We believe it’s likely the Cabinet of Ministers could hike taxes to
compensate the heightened spending to keep the budget deficit unchanged (and
keep the International Monetary Fund satisfied as well).”
Kyiv Post staff writer Denis Krasnikov can be reached at [email protected].
